UPS i.e. Unified Pension Scheme is a new pension scheme launched by the Government of India, which will be applicable from 1 April 2025. The government will also contribute to this scheme, which will give more financial security to government employees.
Government’s contribution to UPS scheme
Under UPS, the government will contribute 18.4% of the employee’s salary. At the same time, the employee will have to deposit 10% of his basic salary and dearness allowance. Thus, the scheme will be different from OPS and NPS as it will include the contribution of both the government and the employee.
UPS vs other pension schemes
Planning employee contribution
Calculation of UPS pension
Pension = 50% of the average basic salary of the last 12 months of service
At least 25 years of service mandatory
On death of the employee, the family will get 60% of the pension
Employees who have completed 10 years of service will also get minimum ₹ 10,000 monthly pension
Which option is better?
If an employee is eligible under OPS, OPS will be the best option, as it does not have to contribute and the entire pension is guaranteed. But UPS can be a great option for employees who are not eligible for OPS, because the government’s contribution in it is more and will get guaranteed pension.
How to apply?
Government employees can switch from NPS to UPS as per their service book. For this, they should contact their department or apply online on the government portal.
The UPS scheme is an attempt to bring a safe and stable pension system for government employees. If you are a government employee, then choose the right plan according to your needs.
